Determine the point that maximizes consumers utility given

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Reference no: EM13390202

Consider a consumer with utility u(x, y) = √xy . The consumer has $100 to spend, and the price of X is $5 and the price of Y is $2.

(1) Graph the budget line.

(2) Find the point that maximizes the consumers utility given the budget. Draw the indifference curve through this point.

(3) What are the expenditure shares?

Reference no: EM13390202

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